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Oswal Woollen Mills Ltd. v. Union Of India (Uoi) And Ors
Factual and Procedural Background
The central issue in this group of 17 Writ Petitions, including Civil Writ 4144 of 1982 (C.L. Jain Hosiery Mills Ltd. v. Union of India and Ors) and others, was whether landing charges could be included in the assessable value of consignments imported into India for the purpose of computing customs duty. Among these, the case of Oswal Woollen Mills Limited was illustrative. This petitioner imported white synthetic waste (acrylic waste) from the United Kingdom in two consignments arriving at Bombay port in early 1982. The Customs Authorities included landing charges in the assessable value for customs duty calculation and additionally demanded countervailing duty equal to excise duty under relevant notifications. The petitioner challenged both the inclusion of landing charges and the levy of countervailing duty. The writ petitions were filed seeking relief under Article 226 of the Constitution.
Legal Issues Presented
- Whether landing charges can be included in the assessable value of imported goods for the purpose of computing customs duty payable under the Customs Act.
- Whether the countervailing duty equal to excise duty could be levied on the imported goods under the relevant Customs Excise Tariff notifications.
- Whether the petitioners could invoke the writ jurisdiction under Article 226 without first availing the alternative remedy of appeal under the Customs Act.
- Whether the prescribed form of the bill of entry under Section 157 of the Customs Act was illegal or prejudicial to the petitioners.
Arguments of the Parties
Union of India
- Raised a preliminary objection that petitioners had not availed the alternative remedy of appeal under the Customs Act, thus the writ petitions were not maintainable.
- Relied on the Division Bench judgment of the Delhi High Court in Super Traders v. Union of India and Ors, which held that landing charges are includible in the assessable value and that failure to avail the statutory appeal was a ground for dismissal.
- Also referred to the Gujarat High Court decision in Prabhat Cotton and Silk Mills Limited v. Union of India, supporting inclusion of landing charges under Section 14 of the Customs Act.
- Respondents agreed not to raise objections on limitation if appeals were filed within one month.
Petitioner (Oswal Woollen Mills Limited)
- Initially challenged inclusion of landing charges in assessable value and the levy of countervailing duty.
- Conceded, in view of the cited judgments, that landing charges could be included in the assessable value for customs duty.
- Conceded that writ proceedings were not appropriate for challenging countervailing duty as it involved disputed factual questions.
- Contended that the remedy of appeal was not appropriate due to challenge to the form of bill of entry prescribed under Section 157 of the Customs Act.
- Failed to demonstrate any illegality or prejudice arising from the prescribed form of the bill of entry or the information required therein.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Super Traders v. Union of India and Ors (Delhi High Court) | Landing charges are includible in the assessable value under Section 14 of the Customs Act; dismissal of writ petitions if alternative remedy of appeal not availed. | The Court relied on this precedent to hold that the petitioners should have availed the statutory appeal remedy and that landing charges are includible in assessable value. |
| Prabhat Cotton and Silk Mills Limited v. Union of India (Gujarat High Court) | Landing charges payable to port authorities are includible in the assessable value under Section 14 of the Customs Act, 1962. | Supported the Court’s conclusion on inclusion of landing charges in the assessable value for customs duty computation. |
Court's Reasoning and Analysis
The Court examined the main issue of inclusion of landing charges in the assessable value for customs duty and found that two authoritative judgments from the Delhi and Gujarat High Courts had already settled this point in favour of including landing charges. Consequently, the petitioner’s challenge on this ground was untenable. Regarding the levy of countervailing duty, the Court observed that writ proceedings were not appropriate due to the factual disputes involved. The Court further considered the petitioner’s contention that the statutory appeal was not an adequate remedy because of a challenge to the prescribed form of the bill of entry under Section 157 of the Customs Act. However, the petitioner failed to demonstrate any illegality or prejudice arising from the form or the information required therein. Therefore, the Court held that the petitioners must resort to the statutory remedy of appeal under the Customs Act. The Court also noted the respondents’ concession not to raise limitation objections if appeals were filed within one month, and accordingly disposed of the writ petitions without costs.
Holding and Implications
The writ petitions are dismissed with directions that the petitioners avail the statutory remedy of appeal under the Customs Act within one month.
The decision directly affects the parties by requiring them to pursue the remedy of appeal rather than writ jurisdiction for the issues raised. No new precedent was established, as the Court relied on existing High Court decisions confirming the inclusion of landing charges in customs valuation and the inappropriateness of writ petitions in such matters where alternative statutory remedies exist.
1. The matter whether landing charges could be included in the assessable value of a consignment imported into India for computing the customs duty payable thereon, was the main ground which led to the admission to hearing of this bunch of 17 Writ Petitions including the above one and besides this Civil Writ 4144 of 1982 (C.L.Jain Hosiery Mills Ltd. v. Union of India and Ors.), Civil Writ 1839 of 1982(Sanjeev Woollen Mills and onother v. Union of India and Ors.), Civil Writ 3738of 1982 (Vardhman Spinning and General Mills Ltd. v. Union of India and Ors.),Civil Writ 2256 of 1982 (Monika India v. Union of India and Ors.), Civil Writ 2529 of 1982 (Punjab Processors (P) Limited v. Union of India and Ors.), Civil Writ 2858 of 1982 (Oswal Woollen Mills Ltd. v. Union of India and Ors.), Civi Writ 3072 of 1982 (Punjab Processors Limited v. Union of India and Ors.), Civil Writ 3316 of 1982 (Sriyansh Knitters v. Union of India and Ors.), Civil Writ 3672 of 1982 (Oswal Woollen Mills Limited v. Union of India and Ors.), Civil Writ 3991 of 1982 (Malwa Cotton Spinning Mills Ltd. v. Union of India and Ors.), Civil Writ 4141 of 1982(Dhowan Woollen Mills v. Union of India and Ors.), Civil Writ 4059 of 1982(Oswal Woollen Mills Ltd. v. Union of India and Ors.), Civil Writ 5247of 1982 (Nagesh Hosiery Exports v. Union of India and Ors.), Civil Writ5197 of 1982 (Sandeep Woollen Mills v. Union of India and Ors.), Civil Writ 4830 of 1982 (Oswal Woollen Mills Limited v. Union of India and Ors.) and Civil Writ 5721 of 1982 (Shaktiman Woollen and Hosiery Mills (P) Limited v. Union of India and Ors.). This order shall dispose of all the Writ Petitions referred to above.
2. Illustrative of the issues sought to be raised in these Writ Petitions is the case of the Writ Petition filed by Oswal Woollen Mills Limited.
3. M/s. Oswal Woollen Mills Limited carry on business of importing white synthetic waste (acrylic waste). An order for 128 bales of synthetic waste was placed by this petitioner upon Wattlid Limited of United Kingdom.These goods were shipped to the petitioner on February 5, 1982 and arrivedat the port at Bombay on March 2, 1982. Similarly an order for 102 bales of white synthetic waste (acrylic waste) was placed upon another firm M/s.Michel Fibres Limited of United Kingdom. The foreign suppliers shipped these goods on March 8, 1982 and they arrived at a port of Bombay on April23, 1982. In respect of both these consignments, bills of entry for ware-housing were filed by the petitioner through M/s. Deluxe Shipping Agency.
4. For assessing the customs duty payable on the goods imported, the Customs Authorities included landing charges in the assessable value of the consignment. In addition a demand was also made for duty equal to the excise duty, namely countervailing duty on the goods imported under Item18(iv) of the C.E.T. read with Notification No. 53/72/,-C.E., dated March 17,1972 as amended by Notification No. 53/77-C.E., dated June 18, 1977 and August 12, 1977. The petitioner sought to challenge both the inclusion of landing charges for the assessable value of the goods imported as also the countervailing duty.
5. When these Writ Petitions came up for regular hearing, a preliminary objection was raised by Mr. H.S. Brar, appearing for the Union of India, that the petitioners had not availed of the alternative remedy of appeal as provided to them under the Customs Act and it was therefore, not open to them to seek to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution for seeking the relief claimed. In support of this contention reliance was placed upon the judgment the Division Bench of the HighCourt of Delhi in [Super Traders v. Union of India and Ors., 1982 Excise and Customs Reporter 772-D]. This was againa case relating to the assessment of customs duty on goods imported under the Customs Act. Besides holding that the valuation of goods for the purpose of assessment of customs duty payable thereon Under Section 14 of the Customs Act had to be inclusive of landing charges thereon, it was also held that as the petitioners had not availed of the remedy of appeal available to them under the Customs Act, it would be a proper exercise of discretion to dismiss the petition, on this ground namely that the petitioners had not availed of the alternative remedy available to them under the Customs Act. It may be mentioned here that a Division Bench of the High Court of Gujarat too in Prabhat Cotton and Silk Mills Limited v. Union of India, 1982 Excise Law Times, 203 also held that landing charges payable to the port trust authorities on landing were includible in the assessable value of goods Under Section 14 of the Customs Act, 1962.
6. In the face of two judgments referred to above Mr. Laxmi Grover, counsel for the petitioner fairly conceded that he could no longer seek to pursuade this Court that landing charges could not be included in the assess-able value of goods imported for computing customs duty payable thereon. He further conceded that as regards the challenge to the countervailing duty sought to be levied on the goods imported, writ proceedings were not the appropriate remedy, as a determination thereof would necessarily involvean enquiry into disputed questions of fact, too.
7. Mr. Laxmi Grover, however, sought to contend that the remedy of appeal would not be an appropriate alternative remedy in this case as a challenge had also been made to the frm of the bill of entry which had been prescribed by the Central Board of Excise and Customs Under Section 157 of the Customs Act. Counsel for the Petitioners could however, not showin what manner this form was illegal or the petitioners were prejudicially effected thereby. In other words, no meaningful challenge could be launched against it. As at present advised all that was required to be incorporated by the petitioners in the bill of entry was merely information regarding the goods imported. Counsel for the petitioners failed to show what illegality attached to such information being required to be given.
8. For the foregoing reasons the petitioners are relegated to the statutory remedy of appeal under the Customs Act. Keeping in view the circumstances of the case, counsel for the respondents very fairly stated that no objection on the ground of limitation in the filing of appeals in these matters by the petitioners shall be raised, if such appeals are filed within one month from today. The Writ Petitions are hereby disposed of accordingly. There will be no order as to costs.
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